About Benefit Programs

Money is no longer a promise for hiring the most skilled workers in today's world. When employers are looking for work, the provision of a compensation plan has become a factor to weigh. What are the extra perks that the employee would have access to while at work? They are deducted from the salary paid. According to reports, good compensation would aid in the development of a strong working partnership between the employer and the employee (Perrott, 1966). Employees would be self-motivated if the terms of operation and rewards are beneficial. A decent compensation plan can help an organization reduce workforce turnover. Companies differ in their benefits packages. It is important for a company to consider its package options carefully. The management plays a vital role in deciding the benefits to offering their employees as it will be a factor while evaluating productivity. The packages in most cases are dependent on the type of work or the working environment.

Some of the benefits provided by major companies include insurance covers, paid sick leave, vacation, retirement plan, and wellbeing program to offer incentives to individuals. Other benefits are profit sharing, commute allowance, gym reimbursement, subsidized products and services costs, salary increase, bonus, flexible working schedules, and disability insurance. A company may not be in a position to provide all the above benefits (Perrott, 1966). However, it can choose a combination of several benefits that cut across every employee such as medical cover, bonuses, salary increase, and paid leaves. If a company can offer the basic benefits, it will experience a low turnover as well as secure the best-talented employees.

StopandShopToday is an incorporation that started operating in 1991. At its start, the employees were happy despite fewer benefits offered. However, the factors such as an escalation of medical health insurance costs have created a concern among the company owners. The employees have started to complain over the health premiums paid. The company has had difficulties in scheduling employees on paid leaves and vacations as its stores are opened throughout the year except on Christmas and New Year's Day. The employees have complained about the failure of the company to offer them with the leave days and vacations.

The company is evaluating its ability to provide the employees with better benefits packages. The following is the outline of the evaluated corporate compensation and benefit costs.

Total wages and salaries: 50%

Total benefits costs: 25%

Paid leave: 5%

Supplemental leave: 2%

Insurance: 6%

Retirement and Savings: 2%

Legally required benefits: 10%

Other benefits: 0%

The company is further seeking to compare its benefits with the benefits as provided by the US Bureau of Labor Statistics (BLS). According to the National Compensation Survey (NCS) mandated by the BLS to carry out a survey on benefits, companies offer these packages differently. The NCS compared both private and public incorporations (Wiatrowski, 2000). By March 2005, the following were the benefits provided.

Wages and salaries 71.2%

Insurance 7%

Legally required benefits 8.7%

Paid leave 6.4%

Supplementary pay 2.8%

Retirement and savings 3.7%

Other benefits 0.2% (these are career-related, family, and friends programs)

Comparing the company's data with the NCS data, there are some areas that the company needs to update its compensation. Irrespective of the quality of benefits, the company should not use a large portion of the workers' wages and salary to cater for their costs. In 2005, companies spent the largest percentage of salaries and wages (Wiatrowski, 2000). Comparing this with the StopandShopToday, which is spending 50% on salaries and wages it can be seen that the company is underspending. Furthermore, the company reported to spent 25% on employees' benefits. The amount is very high. Instead, it would have spent more on premium benefits that are helpful to the employees like life insurance, paid leaves, and supplementary pays. These primary benefits will motivate employees and improve productivity.

The packages differ depending on the type of company according to BLS. From the data collected and compiled in a report in 2005, there is evidence of this difference (Pierce, 1999). Therefore, it is important to analyze the applicability of more benefits with respect to the type of company. StopandShopToday can be categorized as sales and related services company. The rate of wages and salaries is 70% while the benefits are rated at 20%.

The incorporation needs to update its compensation schedule. The benefits provided by the company are below the average as determined by BLS. It is also important for the company to consider the addition of more benefits to the employees. There are many benefits that the company has not considered which have been deemed important by the BLS. It is worth to provide compensation according to correspond with the standards. The company can also introduce an option where an employee can select several benefits from a list added to the basic benefits. As such, the employees will give the management their preferred compensation type. Implementation of a good benefits package will ensure that the company retains the best employees.

References

Perrott, G. S. (1966). Federal employees health benefits program. 3. Utilization of hospital services. American Journal of Public Health and the Nations Health, 56(1), 57-64.

Pierce, B. (1999). Using the National Compensation Survey to predict wage rates. Compensation and Working Conditions, 4, 8-16.

Wiatrowski, W. J. (2000). The National Compensation Survey: Compensation statistics for the 21st century. Compensation and Working Conditions, 5(4), 5-14.